Disaster relief needed for manufacturing

By Gary Chaison | September 1, 2007

A TOOL and hardware plant closes in Massachusetts; a knitting mill shuts down in North Carolina; workers are laid off at an aircraft factory in Connecticut - the decades-long decline of manufacturing in America keeps producing one sad story after another. Many of the operations that remain, whether manufacturing appliances or furniture or tools, are so vulnerable that they too could be downsizing or closing soon.

Scattered through states with heavy losses are communities that resemble disaster areas, much as if hurricanes or floods had wrecked their downtowns. Massachusetts, at least, is fortunate, because it has been able to reinvent itself time and again. What were once tool factories in Worcester have been converted to restaurant, retail, and office complexes. The tobacco warehouses and glass factories of South Boston are now condominiums and artist studios. But the adjustment has been long and painful, and many people have been left out of the economic rebound.

The best answer is to treat the closing of major manufacturing plants as the emergencies that they are. This means providing the intensive, comprehensive aid similar to what is given in disaster-stricken communities.

The causes of manufacturing employment decline are well known. Companies lose market share to foreign low-cost producers (in the tool and furniture industries) or move their operations overseas in search of lower wages (in textiles and electrical appliances) or apply production techniques that require fewer workers (in steel and chemical industries). During the past 20 years, according to the US Department of Labor, 4.8 million jobs were lost in manufacturing, while only 200,000 were gained. Thirty-seven states lost manufacturing jobs.

Massachusetts - down 375,000 jobs - was among the hardest hit.

For residents of communities where jobs are lost, the consequences are catastrophic. Workers settle for low-skilled, low-paying jobs, often in retail and healthcare. The younger workers and their families leave. Older workers, less mobile and less employable, draw heavily on community assistance. A death spiral begins: Teachers and firefighters find their jobs threatened because of a shrinking tax base. Community infrastructure becomes neglected.

A massive nationally coordinated and community-focused relief program for job losses in manufacturing has never been attempted. But federal departments, including those for emergency relief, health and human services, commerce, environment affairs, and transportation must work together to devise specific plans to make declining communities attractive and thriving again.

Relief plans should include extended unemployment insurance and healthcare benefits for displaced workers as well as assistance to help them meet rent and mortgage payments. Special low-interest and forgivable loans should be provided by the Small Business Administration to keep downtown merchants afloat. Federal grants should be directed at rebuilding schools and modernizing hospitals, and training and raising the pay of teachers, firefighters, police, and healthcare workers. To be judged successful, a comprehensive plan should not only attract employers but also rebuild and revive entire communities, from their schools to their shopping.

Elected officials can blame globalization or corporate greed. Others might consider manufacturing decline to simply be an inevitable step in the evolution of our economic system. What we need are solutions, not blame or justifications.

As Labor Day approaches, it's clear that we need much more than the usual worker training and counseling for jobs that do not yet exist, and may never exist in the community, or the costly incentives for employers to build manufacturing plants but without any guarantees that they will keep them fully operating. Only comprehensive economic disaster relief has any hope of resuscitating the declining communities where manufacturing once thrived.

Gary Chaison is professor of industrial relations at Clark University's Graduate School of Management and the author of "Unions in America."